With WhatsApp, Facebook aims for immediacy

Facebook sees opportunity in real-time conversations carried out using WhatsApp

Popular messaging app WhatsApp is joining Facebook’s team.
Popular messaging app WhatsApp is joining Facebook’s team.

When's the last time you replied, promptly, to a message sent through Facebook? Aren't sure? Well Facebook, craving more real-time usage of its service, hopes to change that.

On Wednesday the company said it was acquiring WhatsApp, a leading mobile messaging service used by people as an alternative to telecommunications carriers like AT&T and Verizon. Facebook said it was paying US$16 billion for the five-year-old buzzy upstart.

Facebook already provides some products for communicating online, but many people don't use them for quick back and forth conversations, CEO Mark Zuckerberg said Wednesday during a conference call with analysts following the company's announcement of the deal.

Those products include a chatting client within Facebook's site on the desktop, as well as a standalone app, called Messenger, for mobile messaging. But those products, Zuckerberg said, are used mostly between people who are already Facebook friends, and not always in real time.

"Someone will send someone a message, and almost like a more informal e-mail, accept a reply later in the day," Zuckerberg said, specifically of the company's Messenger app. But WhatsApp, he said, evolved from replacing SMS.

"Those are two pretty big and different use cases, and the world needs both," Zuckerberg said.

Or at least Facebook, evidently, needs both.

WhatsApp lets people send messages on their mobile device in much the same way they would a text message, but without the standard SMS rates that might apply. Conversations on the app can be carried quickly, either between two people or amongst a small group.

Facebook wants those conversations to be carried out in its ecosystem. "WhatsApp complements our services, and will add a lot of new value to our community," Zuckerberg said. A big chunk of that value, he said, will come from the real-time, in the moment communications carried out by people using WhatsApp.

It's something Facebook wants more of, as part of its quest to win ever more users across the world and provide them with a wider array of services to connect with each other. Under the Facebook umbrella, WhatsApp could fit in nicely with the social media company's plans to offer a wider array a standalone apps around different types of communication and networking.

By acquiring WhatsApp, Facebook could also gain a massive influx of new users, although it's unclear how much overlap there is between the two companies' users. WhatsApp has roughly 450 million people who use its service each month, Facebook said, while Facebook has more than 1.2 billion monthly active users.

But WhatsApp is on a path to having 1 billion users, Zuckerberg said. "Services having 1 billion people are incredibly valuable," he said.

Facebook's monetization plans though are harder to gauge. During the conference call, both Zuckerberg and WhatsApp CEO Jan Koum said their focus now would be on growing users, and that ads would not be the best way to make money within a messaging service. WhatsApp does offer a paid subscription model.

Facebook Chief Financial Officer David Ebersman said the company did not see any regulatory issues under the deal, and that it was expected to close later in 2014.

Meanwhile, although mobile operators still make money on text and on traditional voice calls, those services play a shrinking role in their overall business as alternatives sprout up, analysts said.

"The horse has already left the stable on this one," said Phil Marshall of Tolaga Research. Some carriers, including the big U.S. operators seem to be acknowledging this by structuring most plans with unlimited voice and text.

The tide has probably already turned against telecommunications carriers, the original providers of real-time communications. While Skype and other voice apps ate into minutes, Internet-based "over the top" services such as WhatsApp also overtook carriers in text-message volume in 2012, research company Informa Telecoms & Media reported last year. That year, the OTT players carried an average of 19.1 billion messages per day compared with 17.6 billion daily on SMS.

(Stephen Lawson in San Francisco contributed to this report)

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com

Join the CMO newsletter!

Error: Please check your email address.
Show Comments

Supporting Association

Blog Posts

People in vegan houses shouldn't throw bacon

Picture this. You’re at a Gourmerican burger joint chomping a cheeseburger, when an outspoken vegan friend starts preaching that you’re killing the planet. Last week, that same vegan downed a pricey glass of pinot before their flight to a far-flung destination, armed with their strongest mossie repellant and first aid kit. Anything amiss?

Abbie Love

Strategist, Ikon Communications

The role of the CMO is evolving: Are you keeping up?

My (amazing) vacation in the Galapagos Islands earlier in the year got me thinking about Charles Darwin and his theory of evolution. What does this have to do with the role of today’s CMO, you ask? Plenty.

Sheryl Pattek

Vice-president, executive partner

Getting your business ready for the Entrepreneurial Consumer

We all know the digital revolution has completely transformed the way consumers are interacting with brands, and that a lot of businesses are finding it hard to catch up. One way to closing this brand gap is to understand consumer behaviour and build a brand experience that meets these new needs.

Pip Stocks

CEO and founder, BrandHook


Kerry Edwards

Open Colleges taps into social for better student interaction

Read more

Or just go to sites like www.shopsthatshiptoaustralia.c... and others and be sure that the stores will send to where you live :-)


Why online shopping is like dating – RedBalloon CEO

Read more

Personalisation is the key. Customers demand a very relatable and well defined CX where the sincerity and understanding of their disposit...

Hitesh Parekh

In pictures: Improving cutomer experiences through smart personalisation

Read more

Thanks for this. The key for me is the effective of governance where it dictates and sets the proactive policy when it comes to CX. Tech ...

Hitesh Parekh

6 lessons in modern marketing from a customer experience chief

Read more

Very well said “With today’s consumers more demanding of the brands and merchants they shop, it’s imperative for merchants to not just co...


CMO's top 10 martech stories for this week - 29 September

Read more

Latest Podcast

More podcasts

Sign in